You know that keeping track of your inventory is essential to your company’s success, and that is your responsibility as a business manager. This helps you to control your cash flow and make sound purchasing decisions but also makes sure that there are sufficient products available for the needs of customers.
Efficient inventory management systems are vital to your success in a rapidly evolving and competitive market, as opposed to competing businesses. This is where perpetual inventory systems come into play. But what’s it exactly, and how does it help your business?
In this article, we’re going to explore the world of perpetual inventory systems in depth by
- Explaining the concept and basic characteristics
- Providing practical examples
- Showcasing how our state-of-the-art warehouse management system (WMS) can help you smoothly implement this system
Without further ado, let’s uncover the mystery of perpetual inventory systems together and understand why they are so important to modern businesses.
Understanding Perpetual Inventory Systems
In simple terms, a perpetual inventory system is a method of tracking and managing inventory levels in real time. Unlike periodic inventory systems where physical counts are done periodically to determine inventory levels, perpetual systems continuously update stock levels after every transaction. This means that as soon as an item is received or sold, the system automatically updates the quantity on hand.
Think of it like having a personal assistant who keeps track of your inventory levels 24/7, eliminating the need for manual counting and reducing the chances of human error. With a perpetual inventory system, you can have an accurate and up-to-date view of your stock levels at any given time.
Key Features Of Perpetual Inventory Systems
Continuous Tracking
As mentioned earlier, one of the key features of a perpetual inventory system is its ability to track inventory levels in real-time continuously. This means that you can get instant updates on stock quantities as soon as there is a change in inventory.
Automatic Updates
Another significant advantage of perpetual systems is their automatic updating feature. Every time a product is received, sold, or returned, the system automatically updates the stock levels. This will save time and improve accuracy, thus eliminating the need for manual entry of information.
Improved Accuracy And Visibility
With real-time tracking and automatic updates, perpetual inventory systems offer improved accuracy and visibility compared to periodic systems. This will allow business owners and managers to make informed choices based on accurate information.
Practical Examples
Let’s take a look at two scenarios to better understand how perpetual inventory systems work in real life:
Scenario 1
A customer places an order for 100 units of Product X from your online store. With a perpetual inventory system in place, the moment the order is processed, the system will automatically deduct 100 units from your stock levels. This ensures that you’ll always have an accurate view of your available inventory.
Scenario 2
You receive a shipment of 500 units of Product Y from your supplier. With a perpetual inventory system, as soon as you scan and receive the products in your warehouse, the system will update the stock levels to reflect this change. This will eliminate any delay in updating stock levels and provide instant visibility of the level of your stocks.
The Benefits Of Implementing A Perpetual Inventory System
Now that we have established what perpetual inventory systems are and their key features, let’s look at the benefits of implementing this system in your business:
Real Time Inventory Management
With a perpetual inventory system, you can manage your inventory levels in real time. This means that you’re always in a position to see your stock levels accurately and can detect any discrepancies or problems instantly.
Cost Savings
Continuous inventory systems help to reduce the labor costs associated with manual data entry and physical count by automating the process of tracking and updating records. The risk of overstock or stockout that may lead to financial losses for a company is also eliminated.
Improved Efficiency
With automatic updates and accurate inventory levels, perpetual inventory systems help streamline processes and improve efficiency. This makes it possible for businesses to focus on other important aspects of their operations.
Other Stock Control Methods
While it is a great solution, perpetual inventory systems aren’t the only method for managing inventory levels. Other popular methods include:
- Just-in-Time (JIT): This approach involves ordering inventory only when it is needed, minimizing storage costs, and reducing the risk of overstocking.
- First-In-First-Out (FIFO): In this method, the first products received are sold first, ensuring that older stock is used before newer ones to avoid expiration or obsolescence.
- Batch Tracking: This involves assigning a batch number to each product and tracking its movement throughout the supply chain. It provides a fast way for businesses to identify any issues associated with specific batches.
So why is a perpetual inventory system better than any of these options? The answer is simple – it combines the benefits of all these methods into one comprehensive solution.
Popular Perpetual Inventory Systems
There are many perpetual inventory systems available in the market, but one that stands out is Packiyo‘s cloud-based WMS solution. Packiyo offers an extensive set of features, including real-time inventory tracking and automatic updates after each transaction, which are intended to be used by eCommerce merchants and 3PLs.
The Packiyo WMS and Inventory IMS solutions make it easy for businesses to implement a continuous inventory system with a user-friendly interface and advanced reporting capabilities. It also provides seamless fulfillment of orders and stock management through its integration with several online shopping platforms like Shopify or WooCommerce.
Connect With Our WMS Solution
At Packiyo, we understand the importance of an efficient inventory management system. This is why we’ve developed a cloud WMS solution specifically designed for e-commerce merchants and third-party logistics providers.
We offer an Inventory IMS, which provides real-time visibility into stock levels and automates processes to save time and reduce errors. It’s got a lot of exciting features like:
- Optimized Location Layout – Organize pick zones and overstock locations with built-in dynamic slotting
- Inventory Out, Inventory In – Know every movement of inventory with in-depth reports showing what’s in and what’s coming
- Kits (bundles), Serial Numbers, Lot & Expiration Tracking – Get all the features you need to manage various types of products
- Replenishment Reports, POs, Receiving & Returns – Use the Packiyo Reports to know more than allocation, on-hand, and backorder numbers
- Low Inventory Notifications – Setup inventory thresholds and get notified before the stock is depleted
- Inventory Forecasting Made Easier – Use Packiyo reporting, or Inventory Planner and manage to forecasted demand
You can learn more about our Inventory IMS and its features here.
To ensure that our customers are always ahead of the game, Packiyo stays on top of industry news and events as a member of the online shopping community. In addition, we provide excellent support to help you set up and configure an unlimited inventory system according to your business requirements.
Take The Next Step
Are you ready to take inventory management to a whole new level? To learn more about how our WMS solution can help you implement a perpetual inventory system in your business, contact Packiyo today. With our user-friendly interface, advanced features, and dedicated support team, we are confident that we can help you achieve greater efficiency and success in your eCommerce operations.
You can contact us by filling out our online form or via one of our convenient emails:
Sales & Inquires – hello@packiyo.com
Help & Support – support@packiyo.com
Media & Press – hello@packiyo.com
Don’t wait any longer – join the pack with Packiyo today!
